Today is Non-farm Payrolls day in the US. This data release is generally one of the most important of the month, being a leading indicator of consumer spending and economic health, made public shortly after it is calculated. It charts the change in the number of employed during the previous month. Also released at the same time will be the Unemployment Rate, which has dropped below the 2007 low during H1 2017. The continued fall has put further pressure on the Fed to normalise Interest Rates. Markets also focus on Average Hourly Earnings which is an indicator of labour inflation. Faster wage growth can lead to an increase in the pace of Fed hikes. There have been minimum wage increases in a number of states which could boost earning for January.
Swiss Real Retail Sales (YoY) (Dec) was 0.6% v an expected 1.5%, from -0.2% previously, which was revised up to 0.3%. USDCHF sold off from 0.92320 to a low of 0.93031 after this data was released.
German Markit Manufacturing PMI (Jan) was 61.1 v an expected 61.2, from 61.2 previously. Eurozone Markit Manufacturing PMI (Jan) was as expected, unchanged at 59.6. EURUSD moved higher from 1.24274 to 1.24493 following this release.
UK Markit Manufacturing PMI (Jan) was 55.3 v an expected 56.5, from 56.3 previously, which was revised down to 56.2. GBPUSD moved lower from 1.42631 to a low of 1.42018.
US Continuing Jobless Claims (Jan 19) was 1.953M v an expected 1.928M, from 1.937M previously, which was revised up to 1.940M. Initial Jobless Claims (Jan 26) was 230K v an expected 238K, from 233K previously, which was revised down to 231K. Nonfarm Productivity (Q4) was -0.1% v an expected 1%, from 3% previously, which was revised down to 2.7%. Unit Labour Costs (Q4) were 2.0% v an expected 0.8%, from -0.2% prior, which was revised up to -0.1%. USDJPY moved lower from 109.590 to 109.274 from this data release.
Canadian Markit Manufacturing PMI (Jan) was released at 55.9 v an expected 54.8, from 54.7 previously. USDCAD sold off from 1.23218 to 1.22677, moved by this release.
US Markit Manufacturing PMI (Jan) was 55.5 v an expected 54.9, from 55.5 previously.
US ISM Prices Paid (Jan) was 72.7 against a consensus of 68.0. The previous reading was 69.0. ISM Manufacturing PMI (Jan) was also out at this time, coming in at 59.1 v an expected 58.8, from 59.7 prior, which was revised down to 59.3. And finally, Construction Spending (MoM) (Dec) was 0.7% against an expected 0.4%, from the previous reading of 0.8%, which was revised down to 0.6%. EURUSD moved higher from support at 1.24314 to a high of 1.24975.
New Zealand Building Permits s.a. (MoM) (Dec) were -9.6% form 10.8% previously, which was revised down to 9.6%.
EURUSD is down -0.15% overnight, trading around 1.24894.
USDJPY is up 0.38% in early session trading at around 109.801.
GBPUSD is down -0.04% to trade around 1.42544.
USDCAD is up 0.20%, trading around 1.22894.
Gold is down -0.10% in early morning trading at around $1,347.05.
WTI is up 0.12% this morning, trading around $65.95.
Major data releases for today:
At 09:30 GMT, UK PMI Construction (Jan) is expected to be 52.0 from 52.2 previously. GBP pairs may be moved by this release.
At 10:00 GMT, Eurozone Producer Price Index (YoY) (Dec) is expected to be 2.3% from a previous reading of 2.8%. EUR currency pairs may be moved by this data point.
At 13:15 GMT, US Non-Farm Payrolls (Jan) is expected at 180K v a prior 148K. This measures the change in the number of employed people in January. The Unemployment Rate (Jan) is expected unchanged at 4.1%. This measures the percentage of the total workforce unemployed and actively seeking employment during December. Average Hourly Earnings (YoY) (Jan) is expected to be 2.6% form 2.5% previously. Average Weekly Hours (Jan) is expected to be unchanged at 34. Labor Force Participation Rate (Jan) is expected to be 62.8% from a prior reading of 62.7%. USD crosses could experience volatility around these data releases.
At 15:00 GMT, US Factory Orders (MoM) (Dec) is expected to be 1.5% from 1.3% previously. USD pairs may be moved by this release.
At 18.00 GMT, Baker Hughes US Oil Rig Counts will be released, with a headline number from last week of 759. The expected number this week is 758. WTI Oil can become volatile around this data release and will be in traders’ minds when trading resumes on Monday.
At 19:30 GMT, FOMC Member Williams will speak about the US economic outlook at the Financial Women of San Francisco luncheon. A questions and answers session will follow.